Many Singaporeans aspire to one day, eventually own private property; it’s part of the Singaporean dream. However, buying even a condominium unit—which, compared to landed property, is the more affordable option—is insanely expensive in Singapore.
This is why it’s interesting how Lim Ming Han (or Ming for short) and his partner, both under 30 years old, managed to afford a private condo for their first home. How did they do it? Can you do it too? Read on to find out.
Is It Possible to Own Private Property under 30?
It depends on many factors, like your family background, how much savings you have and how much you earn, but let’s not talk about the Crazy Rich Asians demographic. According to the latest data from the Ministry of Manpower (2020), the median income of full-time employed residents in Singapore is $4,534.
$4,534 is still a considerable monthly sum. So what if you’re just an average Joe? What if you’re working in an industry that does not pay as well as others? Would it be possible to own a condo by 30?
Yes, as Ming and his partner have proven, it’s possible. You just have to be prepared to save up and plan ahead.
Singaporean Couple Buys Condo at Age 27
The couple had wanted to move in together for some time, but understandably, for them, buying a home was not as straightforward.
For instance, in terms of earning power and family backgrounds, Ming and his partner definitely qualify as ‘average Joes’: Ming earns $3,800 monthly at his Public Relations job while his partner earns $4,800 working in the public service. To supplement his income, Ming works as a part-time fitness instructor for an extra $1,200 monthly.
With their total monthly income of $9,800, they actually fall under the $14,000 HDB BTO income ceiling to qualify for subsidised public housing. However, because they are not eligible under the available HDB eligibility schemes, they had to turn to private property.
Another hurdle faced was the lack of information on how LGBTQ Singaporeans could buy a house before they were 35 years old.
Most of their friends were eligible to purchase HDB BTO and resale flats, and there weren’t many online housing guides dedicated to LGBTQ couples. (Psst… to address this, we’ve written a housing guide for LGBTQ Singaporeans to more easily navigate the property buying space).
“Right from the start, we’ve always casually talked about purchasing a house so that we could move in together. It was always at the back of our minds.
This year, we decided to learn more about our options after browsing through PropertyGuru and did some basic calculations on our end. Thinking we may be able to afford a small condo unit, we proceeded to speak to an agent and look at show flats,” shares Ming.
After they decided to take action and started tallying up their savings and browsing homes, they realised that they did not need to wait till 35 to apply for a BTO.
In March 2020, Ming and his partner bought a cosy, 484 sq ft one-bedroom unit at The Florence Residence for $734,000. The condo is located in District 19 and is within walking distance to Kovan MRT and Hougang MRT, which will soon become an interchange for the upcoming Cross Island Line (CRL).
How Did They Finance Their Home?
Given that they each earned under $5,000 a month, financing a condominium purchase sounds like quite a stretch. Let’s break down the costs and payments for their $734,000 condo:
Bank Loan (75% of the purchase price)
Downpayment (25% of the purchase price)
$183,500 ($36,700 paid in cash; paid the rest using CPF)
Stamp Duty and Legal Fees
$2,000 (paid over 30 years)
The couple bought their new home at $734,000 and took a $550,500 bank loan over 30 years. That leaves $183,500 in downpayment.
Upfront, they’ve paid 5% front in cash—$36,700. For the remaining 20%, they were actually given an extension till the end of the year.
Eventually, they will have to pay the $146,800 with a combination of cash and CPF, and this excludes stamp duty and legal fees which will amount to about $19,620.
Moving forward, their monthly repayments are expected to be around $2,000, which they find manageable as they intend to pay with their CPF savings.
Tips for Others Aspiring to Own Private Property Before 30
Of course, the journey will be a lot tougher if you are dreaming of a luxurious bungalow. But if you don’t mind a smaller condo unit or studio apartment as a first home, it may be more achievable than you think. In fact, we’ve previously even shortlisted up to 21 Cheap Freehold Condos in Singapore Under 600k.
Here are some learnings from Ming and his partner.
1. They Were Reasonably Thrifty
The most ‘difficult’ thing about affording a private condo is coughing up enough money for the downpayment. Because you can only take bank loans (private properties are not eligible for HDB Concessionary Loan), you are subject to a Loan-to-Value (LTV) of 75%. This means you can, at maximum, only borrow up to 75% of your property’s purchase price and have to pay at least 25% in downpayment. For a $1 million condo, that’s $250,000.
Read about the difference between an HDB housing loan and a bank loan here. If you need help figuring out whether to take a bank or HDB housing loan, speak to the Home Finance Advisors at PropertyGuru.
Immediately from the above breakdown, you can see that Ming and his partner had to pay a whopping $183,500 downpayment. Ming shares that he saved about 40% of his monthly income, while his partner saved about 25%. Although he could pay off some with CPF, the total monthly savings of $3,200 no doubt helped with the cash cost burden.
2. Ming Took up an Extra Gig to Supplement His Income
If it’s your earning power that’s limiting you, you can consider supplementing your income. As mentioned, Ming took up a side hustle as a fitness instructor to bump up his monthly income from $3,800 to $5,000. This helped him build his savings more quickly.
Of course, it helped that the couple both came from middle-class families and did not have any other liabilities like having to repay a student loan debt, which meant all their savings went to the home.
“I think both of us have average paying jobs but I’m most thankful that I had the opportunity to pick up a side hustle that I enjoy to accelerate this process. Fortunately, we also didn’t have any outstanding loans that we needed to finance, which made saving up for a house a lot easier,” says Ming.
3. They Had a Great Property Agent
When asked what his top tip for hopeful home buyers was, Ming says that a lot of the hassle was left to his property agent. There’s a lot of stigma around agents being expensive, but Ming said he felt having an agent to help took a lot of the stress away.
In fact, he was inspired to become a part-time agent to help other LGBTQ couples (he goes by The Property Ming).
“I was actually a Real Estate student in polytechnic (Diploma In Real Estate Business in Ngee Ann Polytechnic) and I was contemplating to be an agent part-time for a while, with the main focus of supplementing my income.
The pleasant experience with my agent and the process of purchasing my property sparked my interest in the industry once again, and I saw a gap in how I would be able to help people around my age understand the fundamentals of purchasing their first home,” says Ming.
In particular, he wants to help the LGBTQ community, as he understands the struggles firsthand. “Typically many have to tip-toe around their agents when it comes to their relationship status, and it’s difficult to speak up openly,” he adds.
4. They Started Planning Early
Ming openly and candidly admits that this small apartment is not their dream home, but instead a small step in that direction.
“Like most people who are buying a house, we went in thinking that we would need to love this property and see ourselves staying in it for an extended period of time. However, our agents were able to help us shift that mindset to consider both investment and own-stay perspectives,” explains Ming.
By that, he means that he realised that this condo purchase was more of an investment to help the couple afford a more ideal home in five years or so. They plan to leverage their early property purchase to purchase a bigger home in the future.
“The property is located within a region where a lot of upcoming transformation will be happening so we are also confident that we will be able to leverage on this purchase to profit as well,” says Ming.
He adds that by taking this step-by-step approach, he and his partner were actually able to move in together around the same time as most straight couples.
This is the main case for buying a private property as soon as you can afford it. Although saving up is important, on its own, it may not be enough. As Ming puts it: “By buying a home now, you stand a better chance at gaining and profiting from your property than just saving up—the property market will probably appreciate faster than you can save.”
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